German Stocks Climb for Third Day; Adidas, BASF Lead Advance

July 23 (Bloomberg) -- German stocks climbed for a third
day ahead of the results of stress tests on European banks as
Adidas AG’s earnings beat estimates and a survey showed business
confidence unexpectedly surged.

The benchmark DAX Index gained 0.4 percent to 6,166.34 at
close of trading at 5:30 p.m. in Frankfurt, bringing its rally
this week to 2.1 percent. The measure has fallen 2.6 percent
from this year’s high on April 26 amid concern the global
economic recovery is losing steam as indebted European
governments slash spending and China takes steps to cool its
economy. The broader HDAX Index rose 0.5 percent today.

“Stress tests are better than no stress tests,” Torsten
Martens, senior portfolio manager at MEAG Munich Ergo Asset
Management, said on Bloomberg Television this morning. “I hope
we will get more detail this evening, but I’m not sure about
it.”

The tests will establish whether European banks have enough
capital, defined as a Tier 1 ratio of at least 6 percent, to
withstand a recession and a sovereign-debt crisis, according to
a document from the Committee of European Banking Supervisors.
Lenders that fail the tests will have to raise additional
capital. CEBS and national regulators were due to publish the
results after the close of trading today.

Business Climate

The Ifo institute said its business climate index, based on
a survey of 7,000 executives, jumped to 106.2, its highest level
since July 2007, from 101.8 in June. That’s the biggest monthly
increase since records for a reunified Germany began in 1990.
Economists expected a decline to 101.5, according to the median
of 41 analysts’ forecasts in a Bloomberg News survey.

Adidas, the world’s second-largest sporting-goods maker,
jumped 2.2 percent to 42.56 euros after saying net income
increased to 126 million euros ($161.5 million), compared with 9
million euros a year earlier. That beat the 70.9 million-euro
average estimate of four analysts. Revenue rose 19 percent to
2.9 billion euros.

BASF, the world’s biggest chemical company, gained 1.6
percent to 46.71 euros. Akzo Nobel, the biggest paint maker,
said second-quarter net income attributable to shareholders rose
to 273 million euros from 155 million euros a year earlier,
beating the average estimate of 190 million euros from 10
analysts in a Bloomberg survey.